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The Effect of Interventions to Reduce Fertility on Economic Growth

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Abstract

We assess quantitatively the effect of exogenous reductions in fertility on output per capita. Our simulation model allows for effects that run through schooling, the size and age structure of the population, capital accumulation, parental time input into child-rearing, and crowding of fixed natural resources. The model is parameterized using a combination of microeconomic estimates, data on demographics and natural resource income in developing countries, and standard components of quantitative macroeconomic theory. We apply the model to examine the effect of an intervention that immediately reduces TFR by 1.0, using current Nigerian vital rates as a baseline. For a base case set of parameters, we find that an immediate decline in the TFR of 1.0 will raise output per capita by approximately 13.2 percent at a horizon of 20 years, and by 25.4 percent at a horizon of 50 years.

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File URL: http://web.williams.edu/Economics/wp/AshrafWeilWildeFertility.pdf
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Bibliographic Info

Paper provided by Department of Economics, Williams College in its series Department of Economics Working Papers with number 2011-10.

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Length: 46 pages
Date of creation: Aug 2011
Date of revision:
Handle: RePEc:wil:wileco:2011-10

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Keywords: Fertility; Population size; Age structure; Child quality; Worker experience; Labor force participation; Capital accumulation; Natural resources; Income per capita;

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  1. Matthias Doepke & Moshe Hazan & Yishay Maoz, 2007. "The Baby Boom and World War II: A Macroeconomic Analysis," NBER Working Papers 13707, National Bureau of Economic Research, Inc.
  2. David N. Weil & Joshua Wilde, 2009. "How Relevant Is Malthus for Economic Development Today?," American Economic Review, American Economic Association, vol. 99(2), pages 255-60, May.
  3. David Bloom & David Canning & Günther Fink & Jocelyn Finlay, 2009. "Fertility, female labor force participation, and the demographic dividend," Journal of Economic Growth, Springer, vol. 14(2), pages 79-101, June.
  4. Francesco Caselli, 2007. "The Marginal Product of Capital," The Quarterly Journal of Economics, MIT Press, vol. 122(2), pages 535-568, 05.
  5. Kyung-Mook Lim & David N. Weil, 2003. "The Baby Boom and the Stock Market Boom," Scandinavian Journal of Economics, Wiley Blackwell, vol. 105(3), pages 359-378, 09.
  6. Quamrul H. Ashraf & Ashley Lester & David N. Weil, 2008. "When Does Improving Health Raise GDP?," NBER Working Papers 14449, National Bureau of Economic Research, Inc.
  7. Assaf Razin & Efraim Sadka, 1995. "Population Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262181606.
  8. Ronald D Lee & Andrew Mason & Tim Miller, 1998. "Saving, Wealth, and Population," Working Papers 199805, University of Hawaii at Manoa, Department of Economics.
  9. World Bank, 2005. "Where is the Wealth of Nations? Measuring Capital for the 21st Century," World Bank Publications, The World Bank, number 7505, 5.
  10. William D. Nordhaus & James Tobin, 1972. "Economic Research: Retrospect and Prospect Vol 5: Economic Growth," NBER Books, National Bureau of Economic Research, Inc, number nord72-1, October.
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Cited by:
  1. Das Gupta, Monica & Bongaarts, John & Cleland, John, 2011. "Population, poverty, and sustainable development : a review of the evidence," Policy Research Working Paper Series 5719, The World Bank.
  2. Román David Zárate, 2013. "Family size and children quality: New evidence and new exogenous shocks in the case of Colombian Households," DOCUMENTOS CEDE 010588, UNIVERSIDAD DE LOS ANDES-CEDE.
  3. Wilde, Joshua, 2012. "How substitutable are fixed factors in production? evidence from pre-industrial England," MPRA Paper 39278, University Library of Munich, Germany.

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